The Seattle-based provider delivers Schwab PortfolioCenter, with a flair, to $2-billion Signature Estate

April 12, 2011 — 2:49 PM UTC by Brooke Southall


Advent Axys has been successful in many ways for Signature Estate and Investment Advisors, a Century City, Calif.,-based RIA with about $2 billion in AUM. See How a $2 billion LA-based RIA doubled in size in five years with a laid-back California style.

After all, the technology supported the big Century City-based RIA’s efforts to grow from virtually zero assets under management when its four partners stopped working exclusively as agents of John Hancock in 1997 and formed a registered investment advisor.

Change agent

But when Signature re-hired Andrew Lin, formerly director of investment operations at United Capital Financial Partners, to head up its strategic development last year, he thought it was time for a change. Portfolio management software programming had advanced by leaps and bounds since he’d last worked for Signature, from 2003 to 2007.

“Axys was based on 1980s programming; things have changed to SQL and Web 2.0, and the security of the Internet has gotten better,” Lin said.

Advent Software did not respond to requests for comment.

Scattered offices

The company needed a new platform to support growth that Lin is helping to direct. Signature now has 43 employees in three offices scattered around Los Angeles and one in Vienna, Va. It’s adding a fifth in Redondo Beach, Calif.

It also has plans to aggressively pursue ultra-affluent investors for the first time and to double assets again to $4 billion by 2016, Lin says.

The company also considered Black Diamond Performance Reporting of Jacksonville, Fla., Morningstar Office of Chicago and Advent’s new web-based product, APX. (For reviews, see the RIABiz Technology section.)

Eventually, they settled on Tamarac. Integration with CRM — the front office software that houses client information — was the main concern; Lin decided that Tamarac was better able to weave together all the elements of back and front office.

Dave Welling, Black Diamond’s chief solutions officer, says that he believes Black Diamond gives no ground to Tamarac in integrating with CRM and other applications.

“Some people like to have the DVD player built into the TV, but our perspective is that larger advisory firms typically want the flexibility to choose components that are best in class and best suited for their business,” he said. “As for CRM, we have a direct connection into the CRM system to provide portfolio level information. ... Effectively it is the same 'integration’ that Tamarac has. In fact the CRM in Tamarac is simply a version of Microsoft CRM. Bundling it into the Tamarac solution gives them the marketing story that it is more integrated, but there really is no difference between that and what we have with multiple other CRM systems.”

Black Diamond integrates with multiple CRM systems — Junxure, RedTail, SalesForce, Appcrown and Microsoft. Black Diamond also just had a big win over Advent. See: See: Black Diamond wins a $4-billion RIA right in Advent’s backyard

Welling said he sees Signature’s switch as further evidence that large RIAs are making changes to their technology. See: Schwab chooses some giant software partners, apparently with big RIAs in mind.

Marketing story

Matt Stroh, vice president of marketing for Tamarac, said that his company defines “integration” differently from some competitors.

“To some vendors, integration simply means making a subset of data available for uploading into other applications. Tamarac defines integration within its platform as the seamless sharing of data and functionality across programs without the need for manual intervention. While the definition of integration makes for a great debate amongst vendors, the market, SEIA, and hundreds of other RIAs are choosing a deeper level of integration.”

Integration wasn’t the only asset Tamarac brought to the table, according to Lin. He also liked the fact that the staff at Tamarac comprises former financial professionals who understood his practice as well as the technology. All but one of 30 client-facing employees fit this bill, said Stroh. Tamarac has a total of 85 employees.

Rolling up sleeves

“All of the competitors are willing to roll up their sleeves but Tamarac didn’t say: We’re the best at everything. They took the most integrations and put it together and made it revolve around the CRM.”

Tamarac’s Advisor X brings Microsoft CRM, its own rebalancing software and Schwab PortfolioCenter into one package of pre-integrated software. It also has the benefit of existing in the Cloud. (Signature was able to use Advent Axys across its offices but deliver it over the web through its own servers.)

Tamarac has about 400 RIA clients, which manage more than $200 billion collectively. The company has “a lot of clients with more than $500 million in assets, as well as a significant number of clients with more than $1 billion in assets,” Stroh says. See: Tamarac claims what was unthinkable two years ago — that it is on the same playing field as iRebal for rebalancing software.

Signature declined to say what it will pay for Tamarac, but it’s less than it paid for Axys alone, says Brian Holmes, president and CEO of Signature.

Matt Stroh, director of marketing for Tamarac, says that his company has a pricing advantage over Advent.

More costly

“The data point that we’re hearing from advisors is that when facing the option of upgrading from Axys to a more costly APX, they are surprised to learn that they can get our entire integrated suite and outsourced services for less than it would cost to go to APX—either directly or in the Advent ABOS outsourced model.” Stroh is referring to the fact that Advent sells APX both as desktop software and over the web.

Advent declined to respond to several requests for comment. However, Nevin Freeman, RIABiz chief technology officer and software reviewer, met with Advent president Peter Hess, while he was at Joel Bruckenstein’s T3 conference outside Miami. See: T3 reflections: Where to watch for the next big advances in RIA technology.

At that time, he said that his company is working on a new version (number four) of APX that will have a lower starting price of $5,000. He emphasized, however, that Advent’s pricing is complex and that this price would only apply in certain circumstances. He also told Nevin that useability (more of a ‘dashboard’) over the web is being upgraded and that there will be more integration with other applications.

Lin also considered waiting to become part of Schwab Intelligent Integration. The Schwab solution is still a good ways from completion. It’s expected to have its initial roll-out this fall. (See: Schwab’s Project C now has two tiers and three new names.) He said he felt more comfortable going with Tamarac because he believes it will be more agnostic in choosing the applications that work best together. See: A close look at Tamarac’s Advisor 9 and its strategic use of Schwab software

Editor’s Note: This article was changed to reflect the fact that the Signature partners maintained a full relationship with John Hancock and its IBD, Signator, after forming an RIA.

Mentioned in this article:

Envestnet | Tamarac
Portfolio Management System, CRM Software, Trading/Rebalancing
Top Executive: Stuart DePina

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